U.S. Markets Mixed as Investors Brace for Nvidia Earnings and Anticipated Fed Rate Cuts

Global equity markets saw slight declines on Monday as investors grappled with the likelihood of U.S. interest rates being cut soon, even as oil prices spiked due to rising tensions in the Middle East. The S&P 500 and Nasdaq closed lower after giving up early gains, while the Dow Jones Industrial Average managed a modest climb.

In the U.S., stock index futures fell slightly in evening trading. The decline was mainly due to a rotation out of heavyweight technology stocks, which put pressure on Wall Street. However, the anticipation of upcoming interest rate cuts helped cushion the overall market losses. Investors are particularly focused on the earnings report from Nvidia, which is expected on Wednesday. Nvidia, a leader in the AI sector, has been a key driver of the tech rally this year. Any signs of weakness in its earnings could dampen the enthusiasm for AI-related stocks, which have been a significant part of the market's gains.

Gains in the Oil & Gas, Telecoms, and Utilities sectors were offset by losses in the Technology, Consumer Goods, and Healthcare sectors. The Dow reached record highs as investors shifted their focus to cyclical stocks like financials, which are expected to benefit from the anticipated Federal Reserve rate cut in September.

Nvidia's stock, a central player in the AI-driven rally, dropped 2.3% on Monday and remained flat in aftermarket trading. Despite recent pressure, Nvidia's stock is still up about 150% this year, highlighting its pivotal role in the market. Investors are anxious about Nvidia's earnings, as any shortfall could negatively impact the broader tech sector, which has already seen a pullback. This concern was reflected in the broader market's cautious tone, with technology stocks retreating and cyclical sectors gaining favor.

Elsewhere, Apple shares were slightly up as anticipation grows for the company’s upcoming product launch event on September 9, where many expect new iPhones and Apple Watch models to be unveiled. PDD Holdings saw its U.S.-listed shares plummet nearly 29% after the company missed market expectations for its second-quarter revenue. Tesla also faced a 3.2% decline after Canada announced a 100% tariff on imports of Chinese electric vehicles, following similar moves by the U.S. and European Union.

The energy sector was one of the few bright spots on Monday, with its index rising by 1.11% due to concerns over oil supply disruptions linked to the escalating conflict in the Middle East and production halts in Libya. Boeing also saw a decline, falling 0.85% after NASA selected SpaceX over Boeing’s Starliner capsule to return astronauts from the International Space Station next year.

This week, the Federal Reserve will review a series of key economic indicators, including the revised second-quarter GDP and the Personal Consumption Expenditures (PCE) report, ahead of its September rate decision. While inflation remains a focus, recent statements from Fed officials suggest that labor market risks have become a more significant concern, with inflation close enough to the target to justify rate cuts as early as next month. The economic calendar also includes a durable goods orders report on Monday and the weekly jobless claims report on Thursday.

In addition to economic data, investor attention is focused on Nvidia's upcoming earnings report on Wednesday. Investors are also watching for updates on potential delays in the launch of Nvidia's next-generation Blackwell chip. Other notable companies reporting earnings this week include CrowdStrike, HP, Salesforce, Lululemon, and MongoDB, resulting in the market bracing for a potentially volatile period.

Data for Technical Analysis (30Min) CFD US 500 [S&P 500]

Resistance : 5617.0, 5618.0, 5619.5

Support : 5614.0, 5613.0, 5611.5                            

30Min Outlook

Source: TradingView                                                     

Buy/Long 1 If the support at the price range 5609.0 - 5614.0 is touched, but the support at 5614.0 cannot be broken, the TP may be set around 5617.6 and the SL around 5606.5, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 5617.0 - 5622.0, TP may be set around 5627.0 and SL around 5611.5, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 5617.0 - 5622.0 is touched, but the resistance at 5617.0 cannot be broken, the TP may be set around 5613.6 and the SL around 5624.5, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 5609.0 - 5614.0, TP may be set around 5604.5 and SL around 5619.5, or up to the risk appetite.       

Pivot Points Aug 27, 2024 03:00AM GMT

Sources: Investing 1, Investing 2